Whistleblower in Brazil meat scandal takes on powerful industry

CURITIBA, Brazil, March 24 (Reuters) - When government health inspector Daniel Gouveia Teixeira confronted a Brazilian processed meat plant with what he says was evidence of excess use of marrow, bone and other slaughterhouse by-products in food for human consumption, he was suddenly removed as the plant's inspector.

The incident, nearly three years ago at the Peccin Agro Industrial Ltda plant in Brazil's rural Parana state, led Teixeira to tell police he suspected he was being undermined by corrupt superiors. It also prompted friends to start calling him "crazy" for taking on one of the country's most powerful industries.

Teixeira, 39, is the agriculture ministry whistleblower credited by Brazil's Federal Police with triggering an investigation into alleged bribes paid by meat companies to government food-sanitation inspectors in the world's top exporter of beef and poultry.

Police say in court documents the bribes were paid to cover up serious health violations by some companies in the meat industry, including the sale of rotten and salmonella-contaminated products. Their probe, dubbed "Operation Weak Flesh," has caused some of Brazil's biggest export markets to ban its meats.

Police have accused more than 100 people, mostly inspectors, of taking bribes for allowing the sale of rancid products, falsifying export documents or failing to inspect meatpacking plants at all.

Prosecutors have yet to present charges and the police allegations have not been proven.

BRF SA and JBS, two of the world's biggest food companies, are among dozens of firms targeted in the investigation. Both have denied any wrongdoing.

The anticorruption probe has led to the arrests of 33 sanitation officials and industry employees so far, with federal agents finding violations in at least 21 meatpacking plants across the country.

Industry officials in the sector, which generates over $130 billion annually, have sought to portray the meatpacking arrests as isolated incidents.

Luciano Inacio da Silva, an auditor at the Agriculture Ministry who reviews internal procedures, said the ministry was still investigating Teixeira's allegations but had not yet come to any conclusions. He cited a lack of resources as a reason for the ministry's investigation to lag behind that of the police.

Teixeira worked as an inspector for five years in the state of Santa Catarina before moving to Parana in 2012. He said he repeatedly cited plants run by various companies in Parana, which is at the epicenter of the police investigation, but was routinely reassigned to other plants by his boss, Maria do Rocio Nascimento, each time he did.

Nascimento was arrested by police on March 17 on suspicion of taking bribes from meatpacking companies to move inspectors away from certain plants, according to court documents. Her lawyer, who has not commented publicly, could not be reached for comment.

In early 2014, Teixeira began inspecting the processed meat plant operated by Peccin Agro. After a month of biweekly visits, he said he noticed that one of the production lines was always down.

"People were just standing around," he said, adding that he suspected they were just waiting for him to leave to restart the line.

OVER THE LIMIT

Teixeira then asked the company for documents outlining the raw materials it bought and used for sausage and other processed meat products.

He concluded the documents showed the plant was using an excess of MSM or "mechanically separated meat."

MSM is a paste of marrow, bone, skin, nerves, blood vessels and other scraps. Its use for human consumption is limited, due to concerns over the intake of certain components. In Brazil, a government document posted online states that MSM cannot exceed 60 percent of the content in hams and sausages.

"They were using more than 85 percent MSM," Teixeira said.

Authorities have not confirmed the amount of MSM used by Peccin and Reuters was unable to verify Teixeira's allegation independently.

In September 2014, on the same day he confronted the company about his findings, investigators said owner Idair Peccin called Gil Bueno de Magalhaes, the agriculture ministry superintendent in Parana. Magalhaes, who like other such supervisors is a political appointee, removed Teixeira as Peccin's inspector.

Magalhaes and Peccin, who have been in custody since their arrests on March 17, could not be reached for comment. Their lawyers have not made any public comments and also could not be reached for comment.

A receptionist at Peccin headquarters, which also houses the plant, said no company officials were available to discuss the matter. The plant was shut last week.

In a statement posted on the website for one of its brands, Italli Alimentos, Peccin said the accusations against it were false.

Feeling that his work was being undermined by superiors, Teixeira said he went to the federal police shortly after his removal from the plant.

In November 2014, two months after his Peccin discovery, Teixeira said he was removed from inspecting meatpacking plants altogether by his boss Nascimento. He was assigned instead to his current post -- inspecting veterinary medicines.